Alternative Minimum Tax (AMT)

 

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Alternative Minimum Tax (AMT)

A federal tax aimed at ensuring that wealthy individuals, estates, trusts, and corporations pay a minimal level income tax. For individuals, the AMT is calculated by adding adjusted gross income to tax preference items.



Alternative Minimum Tax (AMT)

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Alternative Investment Market

Alternative Investment Market

A market for small, young and growing companies operated by the London Stock Exchange as a regulated market of a Recognised Investment Exchange and set up in June 1995. It replaced the Unlisted Securities Market (USM). The market provides an opportunity for companies to raise capital for expansion, a trading facility and a way of establishing a market value for their shares.There are about 400 companies listed on AIM. The market cap of the index varies quite widely. AIM companies tend to trade on wider spreads than companies on the main market, and liquidity can be a problem.One of the advantages of investing in AIM companies is that for tax purposes they are treated as 'unquoted investments' (even though they are quoted). The significance of this is that for every year that you hold AIM shares, you get 5% 'taper relief' on any gains you subsequently make. So if you are a higher rate taxpayer who would normally pay 40% CGT, and you hold shares for one year then sell them, you only pay 35% CGT. If you hold shares for four years or more, the tax rate falls to 10%. Note that this only applies to shares bought after 6th April 2000.


Alternative minimum tax

Alternative minimum tax

A tax which targets high wealth individuals to pay a minimum amount of tax. The tax is calculated on the sum of adjusted gross income and tax preference items less exemptions.


Alternative investment

Alternative investment

Investment in items other than stocks, bonds or other securities. Wine, art, antiques are examples.


Alternative order

Alternative order

Used in context of general equities. Order giving a broker a choice between two courses of action, either to buy or sell, never both. Execution of one course automatically eliminates the other. An example is a combination buy limit/buy stop order, where the buy limit is below the current market and the buy stop is above. If the order is for one unit of trading, when one part of the order is executed on the occurrence of one alternative, the order on the other alternative is to be treated as cancelled. If the order is for an amount of more than one unit of trading, the number of units executed determines the amount of the alternative order to be treated as cancelled. See: Either-or order.


Alternative investments

Alternative investments

Refers to investments in hedge funds. Many hedge funds pursue strategies that are uncommon relative to mutual funds. Examples of alternative investment strategies are: long-short equity, event driven, statistical arbitrage, fixed income arbitrage, convertible arbritage, short bias, global macro, and equity market neutral.


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